Do you want to protect and preserve for yourself and your loved ones the substantial estate you have worked so hard to build? At Panitz & Kossoff, LLP, our attorneys provide estate planning and probate representation to clients throughout Southern California, including Thousand Oaks, Malibu and Westlake Village.

They may not know how much money they have or if there’s enough to keep the household running after the loss of the main breadwinner. If they haven’t handled budgets and planning, they may not be at all confident that they can.

Women need to have a basic knowledge of how much money they have and how it is allocated. A 2014 study by Prudential found that 27% of married women say they “take control” of financial and retirement planning and manage it themselves. That means that 73% of married women do not. With this gap in knowledge, here are the three basic financial measures that all married women should know about their money:

Research Your Annual Household Income. Determine how much you and your husband earn together. Review your income from investment accounts, jobs, rental real estate, pensions, Social Security and business investments. If there’s a divorce, the lists of assets and income are an important part of the property settlement. Review your tax returns from the past two years and keep a copy of each tax return going forward.

Understand Your Assets and Debts. At least once a year, make a list of everything you own. Don’t forget checking and savings accounts, 401(k) retirement plans, life insurance and real estate. It’s important to know your net worth, so next to each asset, make a note about any corresponding loans. An annual review also helps make sure couples don’t forget about any investments they may have made years ago, like a stock that may not be performing well. It is also important to determine ownership in each asset. This will be important, if your spouse passes away, and could affect the income tax you pay each year.

Do You Have an Estate Plan? If you and your spouse don’t have a will, talk to a qualified estate planning attorney and bring the household balance sheet to the meeting. If you’ve made a will, review it and make certain you know which assets you’ll inherit if your husband passes away. You should also determine how much income will be available from life insurance and other sources to support you for the rest of your life. If your attorney only provides an electronic copy of the will, print out a copy and keep it in a safe and accessible spot.

The emotional loss of a husband, or the end of a marriage, is tough enough. Add financial worries to it, and the burden becomes that much harder. Women who are accustomed to dealing with finances and estate planning, will be much better prepared to cope with their new lives as singles.

The Oscar-winning star of “Good Will Hunting,” who was beloved for his manic humor, died in August 2014 at age 63 in a suicide in his Northern California home.

The New York auction will encompass works and items spanning the couple’s “diverse interests and careers, all reflecting their shared passion for collecting,” the auction house said in a statement.

Marsha Williams, a producer, was the actor’s second wife. They divorced in 2010.

Some of the estate collections’ highlights up for bid, include a Hogwarts School robe worn by Daniel Radcliffe in the first “Harry Potter” movie, estimated at $10,000 to $15,000, and a Deborah Butterfield horse sculpture, “Madrone (Cody),” estimated at $220,000 to $280,000. Experts say that Hollywood memorabilia has historically soared to many times the presale estimates.

Sotheby’s also says that the estate will also offer for sale autographed scripts, awards, props, and wardrobe associated with projects from across the Williams’ careers, as well as furniture from the couple’s homes and decorative items, including art by British graffiti artist Banksy.

Some of the proceeds from the estate sale will benefit The Juilliard School, Wounded Warrior Project, the Challenged Athletes Foundation and the Christopher and Dana Reeve Foundation.

A public exhibition will open at Sotheby’s on September 29 in New York.

Williams, known for hit films including “Mrs. Doubtfire,” “Good Morning, Vietnam” and “Dead Poets Society,” died of asphyxia after hanging himself at his home, local authorities said. He was suffering from Lewy body dementia, which causes a progressive decline in mental ability.

Since his death, a study found that suicides among men aged 30-44 have increased by 12.9%. Earlier this year, designer Kate Spade and chef Anthony Bourdain also committed suicide.

A joint bank account can be a quick and easy way to help your parents pay bills and monitor their spending. With you monitoring their account, it’s also easier for you to see potential fraud. It allows an adult child to watch for unauthorized purchases or other issues with the account, like late fees or overdrafts. Another benefit is that in the event of your parents’ deaths, you will have immediate access to the account funds without the need to go through the probate process. This can be helpful when paying burial and other final expenses.

However, there’s plenty that can go wrong if you have a joint bank account with your parents.

First, your parents’ money won’t be safe from your own debts or liabilities. If something happens to you, like an accident, divorce, or bankruptcy, you’ll be putting your parents’ money at risk. Depending on the rights of survivorship on the account, all the money in the account could go directly to you when the last of your parents dies. That would disinherit your brothers and sisters.

If you make deposits to the account yourself, it may impact your parents’ eligibility for government benefits, like Medi-Cal. A joint account may also play a role in your child’s student financial aid eligibility because government and financial institutions can designate all the money in the joint account as your money—even if half of it is yours and half belongs to your parents.

There can also be tax implications to having a joint account. The IRS could deem this to be a gift, triggering a gift tax return, if the account is valued above $15,000 (from each parent for 2018). Likewise, if the parents and adult child open a new account together, and the parents deposit a large amount of money which the adult child later withdraws, it could arguably be seen as a gift.

Look at these options that might work better for you and your family instead of a joint bank account:

With signature authority on an account, you can pay your parents’ bills. However, you won’t be authorized to use the money in ways that aren’t for their benefit, and the money will be protected from your creditors.

With a durable power of attorney, an adult child can make financial decisions on the accounts that are titled in the parents’ names. The DPOA should be durable, so that it will still be in place, if the parents become incapacitated. However, banks often are very reluctant to honor powers of attorney -- even when they are done on the bank's own forms.

Your parents can create a revocable living trust, appoint you as co-trustee and open a bank account in the name of the trust. Talk with an estate planning or elder law attorney to see if this makes sense in your situation.

If you’re worried about your mom or dad’s mental capacity, you petition the court for conservatorship, which will let you to manage his or her finances. The conservator doesn’t own the funds, and the money can’t be garnished or seized to settle a conservator’s debts. However, it’s a difficult, complicated and costly process. All concerned may be better served to have a durable power of attorney in place, before a parent becomes incapacitated.

What if your larger concern is that funds will not be available after your parents die, because they’ll be part of probate? One way to address is by adding a ““Payable on Death” provision to their bank account. The funds will be paid directly to the account’s beneficiaries. A word of caution: speak with an estate planning attorney to be sure that this will not have an impact on any estate planning already in place. Also recognize that a payable on death designation does nothing to gain access to funds for your parents' needs while they are alive.

First and foremost, consider the implications to YOU and your loved ones of the progression of the disease with which you have been diagnosed. Do you have enough assets to provide for care if your home? If so, will that be medically feasible throughout the duration of your suffering? If so, what will that look like as the disease progresses? If not, what are your options? What types of facilities are licensed to care for people with needs you do or will have given your condition?

For many conditions, the progression of the disease can be predicted. The failure to plan for the period when you won't die is failing to plan for what may be the hardest part of the journey. This is precisely why my firm brought a medical social worker on staff to assist our clients in preparing themselves and their loved ones for the inevitable decline of progressive disease. Take advantage of the burgeoning field of life care planning to make a very difficult time a bit easier on you and your loved ones.

Now to the more standard financial and legal issues that most people discuss. One way to get organized is to set up a ringed-binder notebook so you can easily add information. This will allow you to have all the information in one place. Therefore, your family won’t stress about trying to find things.

If you don’t have an up-to-date will, make a list of your assets, such as your financial accounts, real estate and retirement accounts. You should also make a list of personal belongings and who you’d like to have them, because this isn’t spelled out in a will.

Next, be sure to designate beneficiaries on your financial accounts. Many brokerage firms allow you to attach transfer-on-death instructions to your non-retirement accounts. Transfer-on-death deeds can also be used on real estate in 27 states. While that now is allowed in California, the well-intended but incredibly poorly drafted California law concerning transfer-on-death deeds is such a mess that using it is not at all a good idea -- unless you know for certain that your heirs will not want to sell your house for at least three years (which they will not be able to do because they cannot get title insurance until three years after death if you use a California's transfer-on-death deed), and do not mind personally assuming full responsibility for all of your debts.

You should next list your liabilities, such as your home mortgage, loans, credit card debt, and your insurance policies for health, home, and autos. Create a contact list of people your family can reach for help, like your attorney, CPA, insurance agent, and financial advisor.

If you already have an estate plan in place, it can be a good idea to consult with an attorney experienced in estate planning, if you’re hit with some dire news. That may alter some of your thinking.

Keep all your passwords in the binder. You should also monitor your pension and Social Security benefits, since there could be survivor benefits. Your binder should always include a copy of the previous year’s tax return.

Make arrangements for your pets, so that they do not end up in kill-shelters. If you own a home, create a list of all service agreements, like landscaping and utilities.

Finally, write a legacy letter, instructing your heirs as to what you would want for your funeral arrangements and how you would like your personal belongings to be distributed. Speak with your estate planning attorney to have this information incorporated into your will.

08/08/2018

A recent article -- nj.com’s recent article asks, “How will your inheritance be taxed?” -- discusses "cost basis" of inherited assets. Although the article was focused on New Jersey, much of the discussion applies outside of New Jersey as well (i.e. in California). Thus, it is worth summarizing for our readers.

The article explains that typically, the fair market value on the date of the decedent's death is almost always more than the decedent's cost basis. As a result, it’s called a "stepped-up" basis and it’s possible the basis could be lower.

Because of the step-up in basis, if you sell the property right after death, there’s typically no income tax consequence. The gain you’d report on the sale is the sales price minus selling expenses, less the fair market value of the property at the date of death.

As far as investment accounts, the new basis of a security is calculated by taking the mean of the high and low price of the security on the date of death, rather than the close price. Let’s say that the decedent passed away over a weekend. The date of death value is determined by taking the average of:

the mean of the high and the low value on Friday; and

the mean of the high and the low value on Monday.

The financial institution will usually give you the investment’s value.

For taxable estates, rather than using the date of death, an alternate valuation date (the date six months after the date of death) can be chosen. In that instance, it must be used to value all of the assets as of the date. You can’t elect date of death value for some assets and an alternate value for others. The IRS also requires consistency in reporting. The basis utilized by the beneficiary as the value of the property received from the decedent, can’t be more than the value of the property reported on the decedent's estate tax return.

For any retirement accounts other than Roth IRAs, income tax must be paid when distributions are made to the beneficiary—like it would have had to be paid on distribution to the decedent. The value of the retirement account in the decedent's estate and/or passing to the beneficiary isn’t reduced by the income tax that will have to be paid on future distributions.

Here’s the difference: if the property is gifted to you, that’s when you obtain the donor’s basis in the property. If you sell the property after you receive it as a gift, it’s more likely that you will have to pay income tax on it, than if you inherited it.

If possible, sit down with an estate planning attorney well in advance of any gift or inheritance and map out the best way to handle the transfer of property.

08/07/2018

The creation of an interdivisional task force at the Securities and Exchange Commission (SEC) to protect senior investors, could become a reality, if the legislation continues to move forward.

Investment News recently published “House introduces bill targeting elder financial abuse.” The article reports that Representative Josh Gottheimer, D-N.J., introduced the National Senior Investor Initiative Act of 2018 to create a team of staff members from the SEC's Division of Enforcement; Office of Compliance, Inspections and Examinations; and Office of Investor Education and Advocacy. They would be responsible for examining the challenges facing elderly investors, focusing especially on the issues seniors have with financial services providers and investment products.

The task force would coordinate with law enforcement authorities, federal agencies, other SEC offices and state regulators, and report its findings every two years to the Senate Banking, Housing and Urban Affairs Committee, as well as the House Financial Services Committee.

The group’s objective would be to recommend specific regulatory or statutory changes that would help senior investors.

The bill also calls for the Government Accountability Office (the “GAO”) to study and report on the economic costs of the financial exploitation of senior citizens, within a year of the bill's enactment.

The law has a sunset clause that will end the task force after 10 years.

The full House subsequently passed by a 406-4 vote, the JOBS and Investor Confidence Act of 2018, also known as House Financial Services Committee Chairman Jeb Hensarling’s “JOBS Act 3.0,” which includes a package of 32 bills.

This “package” included H.R. 6323, also known as the National Senior Investor Initiative Act of 2018, which requires the SEC to make the senior task force a reality.

In my view, to date, few legislative or regulatory initiatives have done much to reduce, let alone stop, the thriving industry of elder abuse, and the likelihood that this task force will have any real impact is quite low. Nevertheless, any attention that the federal government and regulators focus on elder abuse is better than what we have today, and maybe it will result in some incremental progress.

08/06/2018

In the next few decades, the largest wealth transfer between generations in recent history will take place. This makes legacy planning more important than ever. It also presents an opportunity: the chance for one generation to thoughtfully share its ideas of what wealth means to a family, what the family values are and determine the best way to pass both wealth and values along to the next generation.

For those who have spoken with me in the past week or so, and asked a simple question such as “what’s going on,” you have heard about the spectacular annual conference of the Purposeful Planning Institute I recently attended, which focused heavily on these types of issues, and gave me some additional tools with which to help clients on the human side of planning for their wealth and, more importantly, for their family.

In addition, Forbes’ recent article, “3 Principles For A Successful Family Legacy,” says that frequently the failure to maintain wealth through the generations is because of a lack of communication, education and trust among generations, not a poor investment strategy or a series of economic downturns. Families who are successful at transitioning wealth from generation to generation, stick to three core legacy planning principles.

Integrating planning. Legacy planning is a collaborative effort that requires open discussion with your wealth advisor, family members and your estate planning attorney. You should first define your goals—how you want to enjoy your wealth and how you want it to benefit your family members and your community. Your legacy is about providing financially for future generations, along with how you want to be remembered. Discussing your values and ambitions to your advisors and those important to you, can help you develop a detailed wealth plan that is consistent with your legacy goals.

The creation of a healthy family wealth culture. Create a healthy culture with a shared set of attitudes, values, goals and behaviors that characterize you as a family. This is vital for legacy planning. Those families who develop a healthy attitude regarding their wealth through open and honest dialogue, are typically more likely to see their wealth preserved from generation to generation.

Develop the next generation. When developing your legacy, be sure to help younger generations understand that thoughtful spending, investing and charitable giving can add to a sense of purpose.

To help move wealth and values across generations, consider a family meeting with your estate planning attorney. If your children are more involved with your wealth management and estate plan, they will be more able to protect your legacy. Age-appropriate transparency, as they are growing up, will make everyone more comfortable with the legacy process.

08/03/2018

Before Michael Jackson was the King of Pop, he and his brothers were trained and terrified by their father Joe Jackson. The senior Jackson, who died in late June at age 89, had no room for softness in his plan to create what became a show business dynasty.

Joe remained unapologetic and even defiant about getting physical with his kids. He told Oprah Winfrey in 2010, that he didn’t regret using a strap as a method for hitting.

Their complicated relationship continued to play out even after Michael’s death. When Michael’s will, signed in July 2002, became public seven years later, it was discovered that Joe was effectively written out of Michael’s fortune.

His father was not among the names in the “Petition for Probate” list, which outlined all of the beneficiaries and fiduciaries named in the will and in the Michael Jackson Family Trust. These included trusts for his children and his mother, Katherine, who was named as guardian of his kids. In fact, rather than his father as a backup guardian for his children, Michael instead listed fellow Motown legend Diana Ross.

Apparently, there was a bit of discord among members of the family, who did not all believe that Michael Jackson’s 2002 will was legitimate. However, even if that had been proven, the three previous drafts of the will would have been considered and none of them included Joe Jackson. His attempt to challenge the will after Michael died failed, and the judge was very clear that Michael Jackson’s wishes were to give nothing to his father.

08/02/2018

With no will or a will that is found to be invalid, the laws of the state determine what happens to any remaining assets. In most cases, only spouses, civil partners or close relatives are legally permitted to inherit from a person who dies without a will. As many estate planning attorneys like to say, if you don’t have a will, the state has one for you—but you might not like it.

Influencive’s recent article looks at what happens if you die without a will. The article, “How Estate Planning Works for Those Who Die Without a Will,” explains that if a person dies without a valid will in place, things may get tricky pretty fast. Some common questions include: What becomes of a mortgage, if the mortgagee dies? What happens to a home, when the owner dies? What becomes of a person’s bank account? How is next of kin determined?

When a property owner with a mortgage dies, the promissory note allows the creditor to get paid from the estate. If the estate can’t fully repay the mortgage, the lender may begin the process of selling the property. When a sole homeowner dies, the home is transferred according to the will. If he or she dies without a will, it is transferred, according to state intestacy laws. Those laws determine who qualifies as next of kin and thereby inherits the estate.

If a couple jointly owns their home and were joint tenants when the first partner dies, the surviving tenant will inherit the other’s share of the property. However, if the partners are tenants in common, the surviving partner doesn’t automatically inherit the other person’s share.

Typically, there are four primary requirements that form the foundation of a valid will:

The will must have been drafted with testamentary intent;

The testator must have testamentary capacity;

The will must have been drafted without fraud, duress, or mistake; and

The will must have been duly executed.

Married and civil partners inherit assets following the rules of intestacy, if they are legally married, or in a civil partnership, when they die. If they only have been living together without any formal union -- as many people do in California -- the surviving partner may be in a world of hurt as she/he tries to assert a claim against the legal heirs. If you are divorced, you won’t inherit anything -- except if you still are named as a beneficiary of a qualified retirement plan.

To save your loved ones from the complex, expensive and stressful process that takes place when there’s no will, make an appointment with an estate planning attorney.

08/01/2018

The concept of continuing care retirement communities, or CCRCs, is an excellent one. Moving into such a facility assures retirees and their children that they’ll be able to transition from the different stages of later years in one location, with a trusted organization providing the care they’ll need. When it works, it’s great. However, before making such a big financial and emotional commitment, understand how the fee structure works, and what the risks may be.

CNBC’s recent article, “Do your homework before moving into a retirement community,” explains that retirees can frequently pay more than $100,000 -- far more than that in Southern California -- as an initial deposit and signing on for additional monthly payments that may change over time, as their need for care increases.

Consider the following, before you decide to live in a continuing care retirement community:

Check out the amenities. The high-demand amenities include fitness centers on-site and multiple dining venues, with cafes and bistros. However, you should also look at their assisted living and nursing care departments before deciding.

Find out about the occupancy level. Lower than 90% occupancy could suggest an issue with being able to fill certain units with new residents. The inability to maintain a high occupancy level could be a sign of problems. Examine the details and work through them with your accountant. This includes the key financial reports from your continuing care center, such as its audited financial statements, data on monthly service fee increases, financial ratios and reserves.

Ask for a look at their financials. When continuing care centers have financial troubles, there’s no guarantee that a resident will get his or her money back. It’s common in that case for another provider to buy out a struggling facility. That may result in a change in services and fees.

CCRCs are regulated -- some barely at all -- by the states where they’re located. Therefore, the level to which regulators scrutinize these communities will vary. Prospective residents should contact the state agency that oversees CCRCs, although elder law attorneys are likely to give prospective residents a lot more attention (though at a price) than most people will get from regulatory agencies.

Make sure that you have a clear understanding of what the monthly fee includes and what additional services, like shopping or in-room dining, costs. You’ll want to know how what the additional charges will be if and when you need to move to another facility on the campus for more services, including skilled nursing care.